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85 Cards in this Set
- Front
- Back
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"Economics has reached a condition of rigor, but alas also mortis"
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Robert Helibroner
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This year the unemployment rate was 25%, and 2 million hobos riding the rails
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1934 Great Depression
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T/F
Post WII Germany money worth less than firewood |
True
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"20% of the earth's population are chronically hungry or starving"
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Paul Hawken
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"The purpose of studying economics is NOT to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economist"
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Joan Robinson
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"Economics is what economists do"
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Jacob Viner
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"...economics is a study of mankind in the ordinary buisness of life"
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Alfred Marshal
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"Economics is the study of the allocation of SCARCE RESOURCES to satisfy unlimited wants"
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Lionel Robbins
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Unlimited Wants + Limited Resources =
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scarcity
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______ _____ + limited resources = scarcity
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unlimited wants
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unlimited wants + ______ ____ = scarcity
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limited resources
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the 3 factors of production
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1. man
2. labor 3. capital |
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All forms of economic societies must determine what 3 things?
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1. What to produce
2. How to produce 3. For whom |
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In a traditional society, it is _____ with little change
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stable
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In a traditional society, growth is ____
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low
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Traditional societies are based on the ____
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past
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3 primary goals of macroeconomic policy
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1. economic growth
2. full employment 3. price stability |
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This society appears to be undemocratic
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command
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Central feature of this society is that decision making is CENTRALIZED
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command
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in a command society, decision making is ________
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centralized
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this society can also be concentrated on BIG BUISNESS
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command
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command societies can also be concentrated on ___ _______
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big buisness
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This society distributes resources on basis of supply and demand
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Market System
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Market systems distribute resources based on ______ and ______
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supply and demand
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in a market system, ____ _____ and _____ are made into commodities
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land, labor and money
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The US is a _____ _______ ________
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mixed market system
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In the US, debate has centered around the proper _______ ___ _________
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scope of government
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4 goals of macro policy
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1. ecomonic growth
2. full employment 2. redistribution of income 4. macroeconomic stability |
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what are 3 assumptions made when deriving a production possibilities curve
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1. 2 goods
2. technology is constant 3. resources are fixed in quality and quantity |
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production possibility curves shows all possible combinations of ____ goods that could be produced at full employment and maximum efficiency
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2
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PPC shows all possible combinations of two goods that could be produced at ____ ________ and ______ ________
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full employment & maximum efficiency
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what 2 conditions must hold for a society to be producing at the frontier of its PPC?
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1. full employment
2. maximum efficiency |
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outward shift =
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1. increase in quantity of resources
2. increase in quality of resources 3. increase in technology |
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unbiased shift =
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increase in techonology applicable to both goods
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biased shift =
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increase in techonology applicable only to consumer goods or capital ( UNEQUAL SHIFT)
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______ ____ _____ occurs when we operate inside the PPC due to failure to maintain full employment
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Demand side waste
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_____ ____ ___ occurs when we operate inside the PPC due to UNDER EMPLOYMENT
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supply side waste
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supply side waste occurs when we operate inside the PPC due to _____ _____
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under employment
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A supply side waste, resources may be used but are _____ _____ _____
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NOT USED EFFICIENTLY
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Movement ALONG the demand curve happens because -
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1. change in quantity demanded
2. change in the PRICE of that good |
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SHIFTS in demand curves happen because -
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1. Tastes and Preferences
2. Income 3. Price of Related Good 4. Expected Prices |
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Increase in taste = ______ in demand
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increase
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Normal Goods
Increase in income = ______ in demand |
increase
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Inferior Goods
Incresae in income = _______ in demand |
decrease
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If we expect prices to go up in future, demand ______
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increases
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Change in quantity demanded results in movement along a given demand curve, caused bye a change in the _____ ____ _____ ______
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price of that particular good
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Demand curve shows what ______ are willing and able to...
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buyers
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Supply curve shows amount of good that ______ are willing and able to...
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sellers
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price of inputs increase, supply ______
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decreases
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price of inputs decrease, supply______
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increases
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increase in technology, _____ in supply
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increase
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What will happen to supply of soybeans if price of corn increases?
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Price of corn increases
Quantity of corn increases supply of soybeans decreases |
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If you impose a tax, supply ______
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decreases
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competition amongst sellers will drive the price ___
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down
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competition amongst buyers will drive the price ___
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up
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Price ceilings are always imposed ____ equilibrium price
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below
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price ceilings are _____ imposed below equilibrium price
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always
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price ceilings are set to -
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1. combat inflation
2. alter resource allocation (WW11) 3. promote equity |
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Price ceilings usually result in ________
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shortages
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Price ceilings usually result in the need for a ____ ______ _____
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new rationing system
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Price floors are used to _____ ______
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maintiain competition (agriculture)
equity (minimum wages) |
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Price floors usually result in a ______
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surplus
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MICRO THEORY of increasing minimum wage says it will ________ unemployment
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increase
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MACRO THEORY of increasing minimum wage says it will _______ umemployment
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decrease (CORRECT THEORY)
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Inelastic demand, E _ 1
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<
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Elastice demand, E _ 1
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>
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In and elastic demand, there is a ___ decrease in quantity demanded
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large
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A type of good that is a necessity is ________
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inelastic
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A type of good that is a luxury is _____
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elasitic
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When close substitues are available, it is said to be that they are ______
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elastic
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when close subsitutes are not available, they are said to be ________
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inelastic
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Elasticity _______ over time
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increases
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When there is a small proportion of the % of budget, it is said to be ____
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inelastic
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Large proportion of the % of budget =
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elastic
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Top 20 percent of families receive about ____ of total income
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50%
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Top 5 percent of families receive about ___ of total income
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20%
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Bottom 20 percent of famlies receive about ___ of total income
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3%
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Compliments in consumption =
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Go together (Tires and Cars)
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what would best explain a decrease in both the equilibrium price and quantity of a product over a period of time?
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A decrease in the price of a SUBSTITUTE in consumption
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economics reflects the assumption that consumer wants are _____
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given
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growth of large corporatinos makes management of demand ______
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necessary
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growth of ____ _________ makes management of demand necessary
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large corporations
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the emergence of the ____ ____ that makes the management of demand possible
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affluent society
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The emergence of the affluent society that makes the management of demand _______
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possible
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"No one whose stomach is empty can be persuaded that he needs entertainment and not food"
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John Kenneth Galbriath
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